TMI Blog1999 (11) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the Income-tax Appellate Tribunal was justified in sustaining the addition of Rs. 64,000 in view of the provisions of section 40A(3) of the Income-tax Act, 1961, and rule 6DD of the, Income-tax Rules, 1962 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in sustaining the addition of Rs. 3,00,000 ?" For resolving the controversy it is necessary to advert to the relevant facts. The assessee filed its return of income for the assessment year 198182 on May 8, 1981, declaring an income of Rs. 41,380. The assessment under section 143(3) was framed by the Assessing Officer on March 27, 1986, and an addition of Rs. 6,08,578 was made on account of alleged bogus purchases. The Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued a notice under section 148 on February 16, 1990. In response to this notice, the assessee furnished a letter on July 9, 1990, in which the validity of the notice was questioned. However, it was also stated that the original return filed may be treated as having been filed in compliance with the said notice. The Assessing Officer thereafter proceeded to complete the reassessment initiated vide notice under section 148 dated February 16, 1990, and also to give effect to the order of the Commissioner of Income-tax (Appeals) dated March 7, 1989, for readjudicating the issue about the payments made in contravention of section 40A(3). He passed an order under section 143(3) of the Act on July 13, 1990, wherein he once again held that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his explanation in respect of the first three payments of Rs. 24,000, Rs. 61,795 and Rs. 17,000. However, he upheld the disallowance of the fourth payment of Rs. 40,000 on the ground that the genuine ness of the same had not been proved. Thus, out of the addition of Rs. 1,42,749 only an addition of Rs. 40,000 was sustained. The Commissioner of Income-tax (Appeals) also deleted the addition of Rs. 3 lakhs on the ground that the Assessing Officer had exceeded his jurisdiction in making the said addition. According to him, when the revised return was filed on March 31, 1987, the appellate proceedings were pending before the Commissioner of Income-tax (Appeals) and as the appellate proceedings were merely a continuation of the assessment procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income-tax (Appeals) on the ground that the assessee had itself declared it in the return filed under the amnesty scheme. It is in this background that the questions formulated by this court have to be answered. Regarding question No. 1, counsel for the appellant has reiterated his stand as taken before the authorities below and relied on the Board's circular dated May 31, 1977. Shri R.P. Sawhney, standing counsel for the Department, relies upon the order of the Tribunal in support of the disallowance. We have heard counsel for the parties and perused the records. The only defence of the assessee before the authorities below has been that the transactions fell within the exceptions provided in the Board's circular dated May 31, 1977 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has submitted that the Tribunal has wrongly upheld the addition on the ground that the assessee itself had shown the income of Rs. 3 lakhs in the revised return. It has been contended that the Tribunal seems to have referred to the return filed on March 31, 1987, which was an invalid return and as such was non est in the eyes of law. In response to the notice under section 148 of the Act, the assessee had requested that the original return filed by it be treated as a return filed in compliance with the said notice. Thus, it was argued that there was no return before the Assessing Officer during the reassessment proceedings in which a sum of Rs. 3 lakhs had been offered for assessment. Shri R. P. Sawhney, Senior Advocate, on the other h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n cases where the assessments in respect of those years are pending. Answer.-In cases where the assessments are already completed, the taxpayer should approach the concerned Commissioner of Income-tax with the full disclosure of the amounts of income and/or wealth concealed in various years and should also file returns for the relevant years. He should also produce evidence of payment of taxes before March 31, 1986. The filing of the returns will be regularised by issue of formal notices under section 148 of the Income-tax Act/section 17 of the Wealth-tax Act. In cases where the assessments are pending, the taxpayer should file revised return before the Income-tax Officer along with evidence of payment of taxes. Question No. 2.-In respe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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